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January 27, 2012

In This Issue

For his third formal State of the Union address, President Obama outlined a set of proposals and initiatives for the 112th Congress to act upon in its final year. These included energy investment ideas and increased funding for research and infrastructure.

Many of these ideas came wrapped in the shroud of a populist tone, a style of messaging the president is expected to repeat as he seeks a second-term this year. “We’ve subsidized oil companies for a century. That’s long enough. It’s time to end the taxpayer giveaways to an industry that rarely has been more profitable, and double-down on a clean energy industry that never has been more promising. Pass clean energy tax credits. Create these jobs.”

The president also sought to strike a consensus tone by avoiding touching extensively on controversial issues and focusing on areas where there has been demonstrated bipartisan consensus, like clean energy. “We can also spur energy innovation with new incentives. The differences in this chamber may be too deep right now to pass a comprehensive plan to fight climate change. But there’s no reason why Congress shouldn’t at least set a clean energy standard that creates a market for innovation,” said Obama.

The president said that environmental stewardship can be achieved without deterring job creation and noted the benefits of federal research investments. “The development of natural gas will create jobs and power trucks and factories that are cleaner and cheaper, proving that we don’t have to choose between our environment and our economy,” he said. “And by the way, it was public research dollars, over the course of 30 years, that helped develop the technologies to extract all this natural gas out of shale rock – reminding us that government support is critical in helping businesses get new energy ideas off the ground.” The president also asserted that immigration reform should include incentives for foreign students who come to the U.S. to study science, engineering and business to become citizens, so they can contribute to economic growth in the U.S.

The president’s call for increased investment in infrastructure, is also an issue that has won bipartisan approval in past years. “During the Great Depression, America built the Hoover Dam and the Golden Gate Bridge. After World War II, we connected our states with a system of highways. Democratic and Republican administrations invested in great projects that benefited everybody, from the workers who built them to the businesses that still use them today,” said President Obama. “Take the money we’re no longer spending at war, use half of it to pay down our debt, and use the rest to do some nation-building right here at home.”

The president touched on government reform proposals intended to make the legislative and executive branch function with greater efficiency. Among these is his proposal that the Senate enact a rule that guarantees all judicial and public service nominations receive a simple up or down vote within 90 days. He also called upon Congress to grant him authority to implement administration proposals to reorganize and consolidate various federal agencies, including a proposal that intends to reform the Department of Commerce.

President Obama called upon Congress to end the often venomous and partisan rhetoric that has prevented the Republican-controlled House and the Democratic-controlled Senate from seeking common ground over the past year. “We need to end the notion that the two parties must be locked in a perpetual campaign of mutual destruction; that politics is about clinging to rigid ideologies instead of building consensus around common-sense ideas,” he said. The extent to which Congress heeds his call amidst a presidential election year, where the days spent legislating in Washington will be consequently shorter, remains to be seen.

On Jan. 18, President Obama announced that he was rejecting approval of a permit to construct and operate the Keystone XL pipeline, which would extend from Canada’s oil sands to refineries in Texas.

The decision was the result of a provision included in the Temporary Payroll Tax Cut Continuation Act of 2011 (P.L. 112-78), which mandated that the administration come to a decision on the Keystone pipeline within 60 days of the legislation being signed into law. The administration contends that the deadline, inserted by congressional Republicans, would not allow enough time to carry out the proper environmental assessments needed to make an informed decision on whether or not to approve the permit.

“This announcement is not a judgment on the merits of the pipeline, but the arbitrary nature of a deadline that prevented the State Department from gathering the information necessary to approve the project and protect the American people,” said President Obama in a press statement. “I’m disappointed that Republicans in Congress forced this decision, but it does not change my Administration’s commitment to American-made energy that creates jobs and reduces our dependence on oil.”

In Dec. 2011, before the legislation had been enacted, the State Department issued a statement asserting that fast-tracking approval of the Keystone pipeline would force the administration to disapprove the permit: “The State Department has led a rigorous, through, and transparent process that must run its course to obtain the necessary information to make an informed decision on behalf of the national interest. Should Congress impose an arbitrary deadline for the permit decision, its actions would not only compromise the process, it would prohibit the Department from acting consistently with National Environmental Policy Act (NEPA) requirements by not allowing sufficient time for the development of this information. In the absence of properly completing the process, the Department would be unable to make a determination to issue a permit for this project.”

Congressional Republicans have pledged that there will be further attempts to fast-track approval of the pipeline through legislation. On Jan. 24, Rep. Ted Poe (R-TX), whose district would include the endpoint of the Keystone pipeline, introduced H.R. 3811, the Keystone For Secure Tomorrow Act, which would legislate approval of the pipeline.

On Jan. 25, the House Energy and Commerce Committee held a hearing on a measure introduced by Rep. Lee Terry (R-NE), H.R. 3548, the North American Energy Access Act. The bill would move permitting authority over the Keystone pipeline from the State Department to the Federal Energy Regulatory Commission and would require approval of the pipeline within 30 days of receipt of an application. FERC officials raised concerns over the legislation, stating that the agency traditionally has authority over interstate natural gas pipelines, not oil pipelines and that the 30 day time frame would not allow for an adequate review process.

House Democrats sent a letter to Obama noting that the legislation bypasses “a thorough review of the project.” Their letter also cited a recent State Department Inspector General review of potential conflicts of interest in the pipeline review process that has yet to be completed.

After the administration announced its decision, the Ecological Society of America (ESA) sent a letter of thanks to President Obama for postponing a final decision on the Keystone pipeline until the environmental review process is completed. ESA’s letter contends that a final decision on the pipeline should “follow the longstanding precedent of proper environmental assessment and scientific review to which this administration and previous administrations have adhered.” The letter notes that the 60 day timeline imposed by Congress does not take into account new environmental assessment directives outlined under a Nebraska state law that was only recently enacted in November of 2011. “The provisions outlined in the Nebraska law make it improbable that a comprehensive environmental assessment can be completed in such a short period,” ESA notes.

TransCanada Pipelines Ltd, the company leading the Keystone effort, has stated that it will not file a legal challenge to the Obama administration over its decision. Instead TransCanada will focus on working with the Nebraska Department of Environmental Quality on the development of an alternative route through the state. The company then plans to reapply for a permit.

For information on the Nebraska Department of Environmental Quality’s work on the Keystone pipeline, click here: http://www.deq.state.ne.us/

On January 13, the White House announced a plan to reorganize and consolidate a number of key federal agencies, largely focusing on commerce and trade. The reorganization would also move the National Oceanic Atmospheric Administration (NOAA) from the Department of Commerce to the Department of Interior. NOAA’s portfolio includes fisheries research and management, jurisdiction over protected marine animals, and ocean and atmospheric research and monitoring.

Moving NOAA from Commerce to Interior would be complex. On the one hand, NOAA was technically established via Executive Order in 1970, not through enacted legislation, so the administration could, in theory, unilaterally change its organization. On the other hand, for practical purposes, Congress would still need to amend a series of laws, including the Magnuson-Stevens Fishery Conservation and Management Act that currently grants authority over fisheries, endangered species and coral reefs under the jurisdiction of the Secretary of Commerce. Ergo, any unilateral move by the president to move NOAA over to Interior without appropriate complementary action from Congress would leave the agency with its hands tied.

While previous administrations have considered moving NOAA to Interior, the idea has been met with some resistance from both ocean advocates and internally from NOAA officials. Both parties have been concerned that NOAA might lose its existing autonomy under the Department of Commerce and could become buried under the Department of Interior’s jurisdiction, which already constitutes multiple bureaus.

On Capitol Hill, the move would also shift jurisdiction between a number of committees, including the House Energy and Commerce Committee, the House Natural Resources Committee, the Senate Energy and Natural Resources Committee, the Senate Commerce, Science and Transportation Committee as well as several House and Senate appropriations subcommittees. While committee leaders in both parties have expressed some openness to the idea of streamlining certain agencies, hearings would likely be held on the matter before any specific legislative action.

On Jan. 17, the U.S. Fish and Wildlife Service finalized a rule that would ban the importation and interstate transportation of four nonnative constrictor snakes, including the Burmese Python. The ban is intended to restrict spread of the snakes, which have heavily impacted portions of the Florida Everglades.

The final rule lists the Burmese python, the yellow anaconda and the northern and southern African pythons as injurious wildlife under the Lacey Act, the law that prohibits illegal trade of wildlife. The U.S. Geological Survey had previously determined the four species as having a high risk of establishing populations and spreading to other locations across the U.S. The ban will become official 60 days after its Jan. 23 publication in the Federal Register.

According to FWS, individuals who own the listed snakes will be allowed to keep them, if permitted under state law. However, snake owners of the listed species will be prohibited from transporting or selling them across state lines.

FWS will also consider listing as injurious five other nonnative snake species proposed in 2010, including the reticulated python, boa constrictor, DeSchauensee’s anaconda, green anaconda and Beni anaconda.

On Jan. 24, the House Science, Space and Technology Subcommittee on Investigations and Oversight convened for a hearing examining recent reports from the Government Accountability Office (GAO) and the Department of Energy (DOE) Inspector General (IG) on whether Advanced Research Projects Agency-Energy (ARPA-E) projects could better be handled by the private sector.

While GAO concluded that DOE could do more to determine the extent of private sector delegation of projects, it found that most government ARPA-E projects could not be completed solely with private sector funding. In addition to the GAO and IG reports, the committee also examined a Republican committee staff response to the GAO report .

With regard to the GAO report, Arun Majumdar, Director of ARPA-E at DOE agreed with the GAO’s finding that ‘most ARPA-E projects could not have been funded solely by private investors’ and ‘venture capitalist[s] generally do not fund projects that ARPA-E looks to fund.’” Majumdar contended that ARPA-E has finalized the IG’s recommended policies for the “monitoring and oversight of awardees, allowable technology transfer and outreach activities expenses, and the process for project termination.”

In his written testimony, DOE IG Gregory H. Friedman stated that “our review revealed that ARPA-E generally had effective systems in place to make research awards and to deploy Recovery Act resources. Of particular note, we found that ARPA-E, despite being a relatively new program, had developed and implemented research proposal selection criteria designed to make certain that awards were consistent with its mission objectives.”

The Republican committee staff report concluded that “while it is clear many ARPA-E projects are pursuing high-quality, potentially transformative research that is too risky for private investment, reviews of GAO work papers and publicly available information reveal many exceptions to this practice, and raise questions regarding ARPA-E’s commitment to ‘carefully structure its projects to avoid any overlap with public and private sources of funding.’”

Committee Democrats charged that the committee staff report was drafted because the majority Republicans did not get the result they expected from the GAO report. “The majority staff went through GAO’s work papers, cherry-picked some examples and then portrayed the law as saying something that it does not say,” asserted Subcommittee Ranking Member Paul Tonko (D-NY). “I am disappointed that partisanship has sunk to the level where we cannot even come together for such a simple thing as acknowledging when we find a program that seems to be on the right track.”

GAO Director of Natural Resources and Environment Frank Rusco noted in his testimony that ARPA-E officials have taken steps to “coordinate with other DOE offices in advance of awarding ARPA-E funds to help avoid duplication of efforts. These coordination efforts can be categorized into three areas: (1) prefunding coordination, (2) coordination of application reviews, and (3) participation in official DOE coordination groups.”

ARPA was first established per recommendations outlined in the 2006 National Academies report, “Rising Above the Gathering Storm.” These recommendations were implemented through the 2007 bipartisan America COMPETES Act (P.L. 110-69). Funding was first granted through the American Recovery and Reinvestment Act (P.L. 111-5).

On Jan. 19, the Department of Interior announced the release of a first draft of its National Fish, Wildlife, and Plants Climate Adaption Strategy, which intends to help decision makers and resource managers reduce the impact of climate change on ecosystems and wildlife.

In 2009, Congress included provisions in the Department of Interior, Environment and Related Agencies Appropriations Act for Fiscal Year 2010 (P.L. 111-88) that called upon the Council on Environmental Quality and the Department of Interior to develop a national climate adaption strategy to improve the resilience of natural ecosystems. More than 100 diverse researchers and managers from across the country participated in the drafting of the national strategy.

The current draft is made up of descriptions of current and projected impacts of climate change on fish, wildlife and plant species, actions that agriculture, energy, transportation and other sectors can take to reduce impacts and a framework for coordinated implementation of the national strategy across all levels of government.

Written comments may be sent to Office of the Science Advisor, Attn: National Fish, Wildlife, and Plants Climate Adaptation Strategy, U.S. Fish and Wildlife Service, 4401 N. Fairfax Drive Suite 222, Arlington, VA 22203.

Additional information on the climate change strategy can be found here: